India’s service sector growth hits 10 month high in June

Ira Singh
Khabar Khabaron Ki,03 July’25

India’s services sector continued its upward trajectory in June, posting its fastest growth in ten months as businesses saw a sharp rise in new orders, strong overseas demand, and a continued increase in employment.The seasonally adjusted HSBC India Services PMI Business Activity Index climbed to 60.4 in June from 58.8 in May, indicating a robust pace of expansion. A reading above 50 on the index signals growth, while below 50 suggests contraction,according to information.
According to HSBC Chief India Economist Pranjul Bhandari, “The Services PMI business activity index reached a ten-month high, led by a sharp rise in new domestic orders. New export orders also expanded, albeit at a softer pace. Margins improved, as the rise in input costs was below that seen for output charges.”New orders rose at the quickest rate since August 2024, fueled by sustained strength in domestic demand and a notable uptick in new export business. Companies reported strong overseas interest particularly from Asia, the Middle East, and the United States.Hiring activity remained resilient, with employment increasing for the 37th straight month in June. Although the rate of job creation slowed from May’s record pace, it still exceeded the long-run average, reflecting confidence in business conditions.
Cost pressures continued to ease, especially in manufacturing and service sectors alike. The rise in prices charged by private sector firms was the slowest in three months, while input cost increases were the weakest since August 2024. The consumer services category saw the highest input cost inflation, whereas the sharpest rise in output charges came from the finance and insurance segment.Experts noted that service providers remain broadly optimistic about future growth, though sentiment showed signs of moderation. Around 18% of firms expressed confidence in higher output levels over the coming year—a proportion lower than recent averages and the weakest since mid-2022.
Meanwhile, the HSBC India Composite PMI Output Index, which combines both manufacturing and services data, rose to 61 in June from 59.3 in May, marking the fastest pace of overall private sector growth in 14 months.Analysts see the latest data as a positive indicator of India’s economic resilience, supported by strong consumer demand, improving international business prospects, and steady job creation in the service economy.